CAF-6 · Chapter 7 · Question 3 of 15
Which of the following results in a 'Deferred Tax Liability'?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: A) Accelerated tax depreciation (tax depreciation is faster than accounting depreciation).
Explanation
Accelerated tax depreciation reduces the tax base of an asset faster than its accounting carrying amount, creating a taxable temporary difference (CA > TB), which leads to a deferred tax liability.
More IAS 12 Income Taxes MCQs
- Q5Deferred tax assets and liabilities should be measured using:
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- Q8Which of the following is true regarding the discounting of deferred tax assets and liabilities?
- Q9How should deferred tax assets and liabilities be classified in the Statement of Financial Position?